Over the past twenty years, there has been steady progress made in the development of methods for retinal repair in animal models. The best results have been obtained when fetal retina has been used as donor tissue, and results to date indicate that immature neurons survive the transplantation protocols much better than mature neurons. Due to ethical and practical concerns with the use of fetal human tissues, the translation of the efforts in animal models to the treatment of human disease will require a new source of developing retinal neurons. To this end, we have developed methods for directing human embryonic stem (hES) cells to the retinal progenitor fate. We have used two different lines of Federally approved human embryonic stem cells, and subjected them to a protocol based on previous molecular studies of eye development. We find that with our protocol up to 80% of the cells in the cultures show characteristic gene profiles of retinal progenitors after three weeks in Retinal Determination (RD) medium. Many of the cells also differentiate into functional retinal neurons in vitro, and preliminary experiments show that the retinal neurons and progenitors derived from hES cells will survive and differentiate following transplantation to degenerating mouse retinas. We now propose to extend these studies in the following three Aims. AIM 1. To determine whether the clock of changing competence is present in hES cell derived retinal progenitors. To determine whether Notch/delta signaling regulates differentiation of hES cell-derived retinal progenitors. AIM 2. To determine whether Notch/delta signaling regulates differentiation of hES cell-derived retinal progenitors. AIM 3. Develop methods to sort retinal neurons derived from human ES cells into types by expression of specific promoter-GFP constructs. AIM 4. To determine whether hES cell-derived retinal progenitors can differentiate into functional photoreceptors following transplantation to mouse models of Leber's congenital amaurosis and Retinitis Pigmentosa, using electrophysiological analyses. If we are successful in rescuing and/or restoring function (as assessed by ERG and behavioral analyses) to animal models of RP and LCA, the results will be a proof of principle that human embryonic stem cells can be used in cell replacement therapies for these retinal diseases.